Most contractors are honest professionals who finish their jobs on time and do great work. But a few bad ones have given entire trades a bad name, leaving customers with cost overruns and unfinished work.
Now, new online resources—and old-fashioned common sense—give savvy homeowners a great set of tools to protect their money and their property.
Check the license. A legitimate local contractor will be licensed to work in the state. You can search most state's licensing boards online—here's Louisiana's—to make sure the business is registered and current. It's also important to see proof of insurance to protect yourself against liability for any damage that occurs as a result of the work.
Seek recommendations. A word of mouth recommendation is tried and true—today, turn to your social network for tips. Tweet the news that you're seeking a contractor, or post it on Facebook. It's surprising how helpful a response you can get from your friends in the area. If someone you know had a good experience with a company, you may, too.
Look for a local favorite. Established contractors have to perform good work to maintain a local business, so a firm with a history in the area is worth considering. And if you have problems later, or need another project done, your contractor will still be around. Just avoid storm chasers or brand new businesses—they could be long gone by the time you realize the work is sub-par.
Read reviews. Angie's List and Yelp both list customer reviews on local contrators. When you're seriously considering hiring someone, get names and contact info for their previous clients. Call the old customers to ask if the project was finished on time and within budget. See about any problems that arose and how the contractor handled them.
Get consistent bids. Be sure competing contractors are bidding on the same scope of your project, especially if one bid seems like too good a bargain to be true. Otherwise, the bids and timeline for the project could be all over the map. When you're getting close to making a hire, put the terms of the bid down in writing. These details can help the contract start to take shape.
Go with your gut. The most important criteria when hiring a contractor is choosing someone you trust. This person will be in your house, around your family, and maybe even ripping out walls, floors and ceilings. If you don't trust the person, for any reason, even just a gut instinct, then don't hire him.
Back up the contract. Have a digital copy of your signed contract. And sort out the details of the contract before making a payment. Agree on the total cost and an approximate finish date before any work gets underway. If you share a Google Doc, you can both have access to the document, and the software will timestamp any revisions and preserve all the previously saved versions.
Cover all the details. No detail is too small to have in writing in the contract. Specify the brand and type of materials being used. Spell out who is supposed to buy certain fixtures, when, and how reimbursements will work. Will a port-a-potty will be on your property? What other materials might be dumped on your lawn?
Establish a timeline. A shared Google calendar is an easy way to stay on the same page for start and finish dates. For small jobs lasting less than a week—sealing a driveway, roofing repairs—your contractor should give you exact start and finish dates. Larger jobs, like kitchen remodels, can take a couple of months, so you won't get a precise end date. But an approximate project timeline can help avoid long, drawn-out projects and cost overruns.
Schedule payments. Tie payments to work phases. Don't pay more than half of the money upfront. Plan to make payments as key parts of the project are finished, leaving a small percentage for when the job is done. Payment details should be spelled out in the contract and again on the project's timeline.
Require a building permit. A permit ensures the work will be inspected to meet local building codes, so make sure your project has one. And make sure your contractor gets it—not you—so you won't be liable if something doesn't meet the building code.
Check for liens. A lien means your contractor owes somebody money, which means something didn't go right with past jobs. It also means your money could go to pay for a previous customer's project instead of yours. Steer clear of anyone with a lien against them.
Know who's on the jobsite. You might sign a contract and make a payments with a person who isn't doing all of the work. Ask up front if your crew will sub-contract parts of the job to somebody else. If so, do the same research into that person's business as you did for the general contractor. It's awkward to have a perfect stranger show up on your doorstep ready to swing a hammer, but beyond that, the balance between contractors and subs can lead to some of the biggest headaches on a big project—delays, incorrect installations, damage to finished work, and all sides blaming the others for errors while no one takes accountability.
Learn your responsibilities. Find out what you need to do before a project starts. Do you need to clean our your cupboards for a kitchen project? Take everything off the walls for a paint job? If your contractor takes time to do it, he's going to charge you. And if you didn't know you needed to cover your patio furniture while paint was being sprayed, it's going to cost you money and make you mad.
Refer to the contract. Disputes tend to arise on a project. If your contractor isn't doing what you've agreed, or the crew is using different materials than you expected, you need to be able to point to the contract to show that you're not getting what you specified.
List the problems. Document problems or instances in which the contractor didn't follow the terms on the contract. Share a punch list the same way you shared a contract and schedule. If the problems are never corrected, adjust the final payment. But be fair—don't try to change the rules because you realized too late you asked for the wrong thing.
Deal with the boss. The contractor is the boss. Don't deal directly with his employees. Don't discuss problems with the subcontractors. If you want some extra work done beyond what's in your contract, have the contractor schedule it with his own crew.
Store your valuables. This is a simple rule when having strangers in your house, whether they're contractors or your kids' friends—don't leave jewelry, money or other valuables sitting out in plain view.
Separate your tools. Workers should have their own tools. If you let the workers borrow yours and they get mixed together, the tools may leave your house on the last day of the job. If you have a lot of tools, and you don't mind sharing them while the work goes on, just take a picture of your pegboard organized the way you kept it before the job started. Make sure it is put back that way when the work is finished.
Make the final payment when it's really finished. Even an honest contractor has his eye on the next job by the time yours is wrapping up. Others may want to take the money and run. To make sure the contractor finished everything as agreed, the best insurance is to withhold the final payment until all the work is done to your satisfaction.